Radhyesham Ramkaran Choube Vs. A.S. Mogare, through L. Rs. and Others - Court Judgment

1. These appeals arise out of common judgment dated 10.08.2001 thereby allowing said appeals filed by the original defendant and setting aside the decree for possession. In view of similarity of facts and common evidence being led in the suits, these appeals are being decided by this common judgment.

2. For sake of convenience, the appellant is being referred to as the plaintiff while the respondents are being referred to as defendants. The suit property comprises of premises in occupation of the respondents initially in the capacity as tenants. The entire house property was owned by one Robort Sitaram and each defendant was the tenant of the respective portions let out to them. The rent payable by each of the defendant was Rs. 30/­- per month. On 29.08.1979 the defendants entered into an agreement with their landlord­Robert Sitaram for purchasing their respective premises. However, subsequently on 28.12.1979 the plaintiff purchased said property by registered sale deed. As stated above the defendants were in occupation of their respective premises as tenants. Thereafter on 03.01.1980 a notice of attornment was given by the plaintiff to each defendant.

3. In the meanwhile the defendants filed suit for specific performance of agreement dated 29.08.1979 against Robert Sitaram and the plaintiff. During pendency of aforesaid suit, on 26.03.1981 the plaintiff issued notice to the defendants seeking possession of the respective premises. The defendants replied to the aforesaid notice and stated that their possession of the premises was in the capacity of prospective purchasers. It was stated that the sale deed dated 28.12.1979 was not binding on them. As possession of the premises in question was not handed over, the plaintiff filed four civil suits being Regular Civil Suit Nos. 82 of 1981, 83 of 1981, 84 of 1981 and 85 of 1981. The defendants contested aforesaid suits and took the stand that the sale deed executed in favour of the plaintiff was not binding on them and that the defendants were not the tenants of the plaintiff. It was further stated that after 29.08.1979, the possession of the defendants was in the capacity as prospective purchasers of the suit premises.

4. All the four suits were consolidated and common evidence was led by the parties. Thereafter the trial Court by common judgment dated 22.04.1985 held that the plaintiff was the owner of the suit premises and that in terms of notice dated 10.03.1981, the plaintiff was entitled for possession of the suit premises. On that basis all the four suits were decreed and the defendants were directed to handover possession of their respective portions to the plaintiff. The defendants being aggrieved preferred appeals under Section 96 of the Code of Civil Procedure. The appellate Court by common judgment dated 10.08.2001 reversed the decree for possession and dismissed the suits for possession filed by the plaintiff. The decree to the extent of arrears of rent was however maintained.

5. While admitting these Second Appeals the following substantial questions of law were framed:

1. Whether in view of defence as raised by the defendant that they are not the tenant of plaintiff and have agreed to purchase the same from original owner Robort Sitaram, are in possession of the property as prospective purchase and not as tenant, constitutes the plea of surrendering of tenancy right and as such said plea found to be not established by the defendant, in favour of plaintiff given on the admission of the defendant.

2. Whether in view of denial of title by the defendant of the plaintiff as their landlord and refusal to pay rent on that basis, forfeits their tenancy rights, and on account of forfeiture, their possession becomes trespasser, and on the basis of title which is found to have been established, the Court could have granted decree for possession in favour of plaintiff.

6. Shri R. L. Khapre, learned counsel appearing for the plaintiff submitted that lower appellate Court erred in setting aside the decree for possession. It was submitted that the defendants had taken a specific stand in the reply to the notices issued to them as well as in their Written Statement that they had not accepted the plaintiff as their landlord. They had stated that their possession of the premises was in the capacity as prospective purchasers in terms of agreement dated 29.08.1979. The aforesaid stand was specifically reiterated in the Written Statement. It was further submitted that by taking such stand the tenants had impliedly surrendered their tenancy rights and hence the plaintiff was entitled for possession on the basis of title. The learned counsel for the appellant relied upon the judgment of the Division Bench in Miss Thrity Sam Shroff Vs. Mehroo Meherji Vakil and Ors. AIR 2010 Bombay 170, to urge that as the defendants had renounced their character as tenants, the plaintiff was entitled for possession on the basis of title. Reliance was also placed on the judgment of the Division Bench in Ashwinikumar Goverdhandas Gandhi and another Vs. Gangadhar Dattatraya Gadgil 1990 Maharashtra Law Journal 18, to urge that if the tenant claimed title in himself as per provisions of Section 111(g) of the Transfer of Property Act (for short the said Act) then permission of the Rent Controller is not necessary. He also relied upon the decision of the Karnataka High Court in B. Paramshivaiah and Another Vs. M. K. Shankar Prasad and Another AIR 2009 Karnataka 88. It was then submitted that on the basis of the stand taken by the defendants in their Written Statement it was open for the plaintiff to seek relief in that regard. In that behalf the learned counsel relied upon the decision of the Supreme Court in Firm Sriniwas Ram Kumar Vs. Mahabir Prasad and Others A.I.R. 1951 Supreme Court 177. It was therefore submitted that the plaintiff was entitled for decree for possession.

7. On the other hand Shri M. B. Badhiye, learned counsel appearing for the defendants supported the impugned judgment. It was submitted that the lower appellate Court had rightly found that permission of the Rent Controller was necessary before evicting the defendants. He submitted that though the plaintiff had sought to amend the plaint during pendency of the First Appeal, said amendment was disallowed and hence plaintiff was not entitled to succeed on the ground that the defendants had denied their relationship with the plaintiff. He, therefore, submitted that no substantial question of law arises for consideration in these appeals and the same were liable to be dismissed.

8. It is necessary to notice certain relevant facts which are in dispute. The defendants who had filed suit for specific performance of agreement dated 29.08.1979 were not successful in their said attempt. The said suit was dismissed by the trial Court which decree was confirmed by the lower appellate Court and Second Appeal No. 346 of 2001 preferred by the defendants was also dismissed on 23.07.2007. It is thus clear that there is no cloud what so ever on the title of the plaintiff who had purchased the suit property as per sale deed dated 28.12.1979.

During pendency of the appeal before the District Court, the plaintiff had sought to amend the plaint by raising additional plea that as the defendants had denied the status of the plaintiff as their landlord, the plaintiff was entitled for possession. Though the lower appellate Court had allowed aforesaid amendment, said order was set aside by this Court in Civil Revision Application No. 967 of 1989 on 03.12. 1991.

9. It would now be necessary to refer to the stand taken by the defendants prior to filing of the suit for eviction. After purchasing the suit property the plaintiff had issued notice to the defendants on 03.01.1980 (Ex.42­C). As per aforesaid notice the defendants were informed that rent of Rs. 30/­ P. M. that was being paid earlier should be paid to the plaintiff. Thereafter on 26.03.1981 another notice (Ex. 49) was issued by the plaintiff seeking possession of the premises in question on the ground that the plaintiff did not desire to continue tenancy of the defendants. To aforesaid notice the defendants gave reply (Ex. 55) on 30.03.1981. It was stated that the ownership of the plaintiff was not being accepted. It was further stated that the defendants had filed suit for specific performance of the earlier agreement and that their possession was in the capacity of prospective purchasers. A specific stand was taken that the defendants were not the tenants of the plaintiff. It was then reiterated that the possession of the defendants was in the capacity of prospective purchasers and on that ground possession of the suit premises was refused to be handed over.

It is, therefore, clear that prior to filing of the suit for eviction the defendants had taken specific stand, firstly denying the ownership of the plaintiff and not accepting his status as the landlord and further taking a specific stand that their possession of the suit premises was in the capacity as prospective purchasers in terms of agreement dated 29.08.1979.

11. In this background the plaintiff had filed four suits for possession against the defendants. It was averred that the plaintiff became owner by virtue of sale deed dated 28.12.1979 and that though notices had been issued to the defendants they had refused to handover possession. A prayer was also made for grant of decree for arrears of rent from 01.01.1980 till 31.03.1981. It was stated that since inception of his ownership the defendants had not paid any rent what so ever.

In the Written Statement the defendants denied the ownership of the plaintiff on the ground that there was an earlier agreement in their favour and that suit for specific performance in respect of said agreement had already been filed. In the specific pleadings the stand was taken that though the defendants were tenants of Robert Sitaram, after 29.08.1979 the possession of the defendants was in the capacity of prospective purchasers of their premises. The stand denying the plaintiff's ownership was also specifically reiterated in the specific pleadings. It was further stated that the defendants were not the tenants of the plaintiff. Without prejudice, it was stated that permission of the Rent Controller had not been obtained before filing the present suit.

12. The aforesaid stand of the defendants was reiterated in the evidence led on their behalf. D. W. 2 Bhanudas (Ex. 79) specifically stated in his examination-­in-­chief that since the date of agreement dated 29.08.1979 the defendants were residing in the suit house as owners. In the cross examination it was specifically stated that the defendants were not treating the plaintiff as the owner of the suit house and that they were not his tenants. It is, therefore, clear that it was the specific stand of the defendants that their occupation as tenants of the erstwhile landlord was only till 29.08.1979 and thereafter they did not recognise the plaintiff either as the owner of the premises or as their landlord. This stand is further fortified by the fact that from 01.01.1980 no rent what so ever was paid by them to the plaintiff who had become owner on 28.12.1979.

13. Section 111(g) of the said Act reads thus:

“by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re­enter or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; [ or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re­enter on the happening of such event] and in [any of these cases] the lessor or his transferee [gives notice in writing to the lessee of] his intention to determine the lease.”

Therefore, if the lessee renounces his character as such by setting up title in a third person or by claiming title in himself lessee of the immovable property stands determined by forfeiture. In Ashwinikumar (supra) while considering the provisions of C. P. and Berar Letting of Houses and Rent Control Order, 1949 (for short, the Rent Control Order) and provisions of Section 111(g) of the said Act, the Division Bench observed in paragraph 19 as under:

“19. Considering the scheme of the Rent Control Order and the class of the persons for whose benefit the provisions have been enacted, it is apparent that the benefit would become available only to a tenant on whim the notice is to be served, if he accepts his character as a tenant and not otherwise. If he repudiates the character of a tenant, he makes it obvious that he does not want to partake of a benefit conferred by the beneficial piece of legislation. We are fortified in this view by the observations of a Division Bench of this Court in Ratanlal Manikchand Shah Vs. Chanbasappa Senganbasappa Chincholi, AIR 1978 Bom. 216, to the effect that a tenant, who disclaims his tenancy, does not fulfil the qualifications of section 5(11) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, and a tenant disclaiming the title of the claimant landlord and his relationship of tenancy literally knocks out the very bottom of statutory protection, and this amounts to disclaiming the benefits available under the Bombay Rent Act. It was pointed out that a tenant disclaims the title of his landlord who accepts such disclaimer and seeks eviction upon the basis thereof, and the voluntary action of the tenant and its acceptance by the landlord results in a bilateral determination of the tenancy and takes the case out of the pale of section 5(11) of the Bombay Rent Act. Evidently, forfeiture of lease arising out of condition (2) of clause (g) of section 111 of the Transfer of Property Act would stand on a footing different from the conditions laid down in conditions (1) and (3) of clause (g). The distinction made by item (a) of clause 13(1) of the Rent Control Order cannot, therefore, be said to be without substance, and we find that the Legislature, in its wisdom, while treating the two classes differently, had a rational basis for classification and it would, therefore, be erroneous to regard the exclusion of the class of cases covered by condition (2) of clause (g) of section 111 of the Transfer of Property Act to be inadvertent or a mistake.”

It was held by the Division Bench while answering the reference as under:

“The provisions of clause 13(1)(a) of the C. P. and Berar Letting of Houses and Rent Control Order, 1949, would come in the way of giving a notice without obtaining the permission of the Controller only in respect of classes covered by conditions (1) and (3) of clause (g) of section 111 of the Transfer of Property Act. That prohibition will not apply to cases covered by condition (2) of clause (g) of section 111 of the Transfer of Property Act, and since the present case falls under the latter category, the permission of the Controller would not be necessary for giving a notice determining the lease as contemplated by clause (g) of section 111 of the Transfer of Property Act. The suit was therefore maintainable, even without obtaining the permission of the Controller, The reference is answered accordingly.”

It is, therefore, clear that the benefit of protection of the Rent Control Order would become available only to the tenant on whom the notice is to be served if he accepts his character as a tenant and not otherwise. If he repudiates his character as tenant he is not entitled to said protection.

14. As noted above, a specific stand was taken by the defendants prior to filing of the suits for eviction while replying to the notices issued by the plaintiff. The ownership and status of the plaintiff as their landlord was denied and such stand was further reiterated by the fact that no amount of rent was paid by the defendant to the plaintiff after he became owner of the premises.

15. As regards the alternate stand taken by the defendants that they were entitled for protection of the Rent Control Order and which stand appealed to the lower appellate Court, it is to be noted that by their own conduct the defendants were precluded from falling back on said stand. It was open for the defendants to have tendered rent to the plaintiff without prejudice to their stand that the suit for specific performance filed by them was pending. However, the defendants chose not to treat the plaintiff either as the owner of the premises or as their landlord. Even after dismissal of the suit for specific performance, it was open for the defendants to have accepted the finality to said proceedings and thereafter they could have treated the plaintiff as their landlord by taking steps in that direction. Same has also not been done. Hence, it will be highly inequitable to permit the defendants to fall back on their said alternate plea which was never persued in the right earnest. It is, therefore, clear that the lower appellate Court erred in setting aside the decree for eviction on the ground that permission of the Rent Controller had not been obtained.

16. As held by the Supreme Court in Firm Sriniwas Ram Kumar (supra) on the basis of the stand taken by the defendant in his Written Statement the plaintiff was entitled to seek relief.

Hence, even if amendment as sought by the plaintiff stood disallowed, in view of the specific stand taken by the defendants in their Written Statement, the plaintiff was entitled to rely upon such stand for seeking appropriate relief.

17. The matter can be looked at from another angle. In view of agreement dated 29.08.1979 between Robert Sitaram and defendants whereby the defendants agreed to purchase the premises in their occupation, the relationship between them of landlord and tenant came to an end. In R.Kanthimathi And Another Vs. Beatrice Xavier (Mrs) (2000) 9 Supreme Court Cases 339, it was held that on an agreement of sale being entered into between the landlord and his tenant, the earlier relationship as such comes to an end. The status of the parties gets converted into that of purchaser and a seller. In said decision it has been observed as under:

“6. Any jural relationship between two persons could be created through agreement and similarly could be changed through agreement subject to the limitations under the law. Earlier when the appellants were inducted into tenancy it only means both agreed that their relationship was to be that of tenancy it only means. Later when the landlord decided to sell this property to the tenant and the tenant agreed by entering into agreement, they by their positive act changed their relationship as purchaser and seller. When the seller-­landlord accepts the sum he actually acts under this agreement. This acceptance preceded by agreement of sale changes their relationship. This is how they intended. Once accepting such a change, their relationship of landlord-­tenant ceases.

7. This Court in Arjunlal Bhatt Mall Gothani v. Girish Chandra Dutta held as under:

“The appellants were tenants in the premises of the respondent landlord and three suits, including an eviction suit, were pending against them. By an agreement between the appellants and the respondent, the respondent agreed to sell the whole property to the appellants for a certain sum to be paid to him by equal instalments. Clause (5) of the agreement provided that in case of default of any instalment, the agreement provided that in case of default of any instalment, the agreement for sale would stand cancelled and if the purchasers failed to pay the defaulted instalments within one month's notice the payments made would stand forfeited and purchasers would make over possession of the property to the vendor.”

“Under clause (5) of the agreement the question of giving notice arises only if the vendor wanted to forfeit the instalments paid by the purchaser. Not even one instalment having been paid the question of forfeiture does not arise and no notice was necessary for cancelling agreement. It stood automatically cancelled. It was sought to be argued before us that once the agreement stood cancelled the appellants stood restored to their original position as tenants and the suit could not be filed without giving notice under the Transfer of Property Act. We are of opinion that when the agreement, dated June 7, 1959, was entered into the old relationship of landlord and tenant came to an end. The rights and liabilities of the parties have to be worked out on the basis of that agreement.

8. This decision clearly spells out that once there is agreement of sale between a landlord and a tenant, the old relationship as such comes to an end. It goes on to record that even after the cancellation of such agreement of sale the status of tenant is not restored as such. In other words, on the date of execution of the aforesaid agreement of sale their status as that of landlord and tenant changed into a new status as that of a purchaser and a seller.”

It is, therefore clear that on such agreement being entered into between Robert Sitaram and the defendants, their relationship as landlord and tenant came to an end and their status changed to that of seller and purchaser. Thus, even otherwise the defendants would not be entitled to contend that they were entitled to protection under the Rent Control order.

18. In view of aforesaid discussion, it will have to be held that the defendants having denied the title of the plaintiff as their landlord even prior to filing of the suit, the same amounted to forfeiture of their tenancy rights in the premises thereby entitling the plaintiff to the decree for possession on the basis of title. The substantial questions as framed are therefore answered accordingly.

19. In view of aforesaid, all the appeals are allowed. The judgment passed by lower appellate Court dated 10.08.2001 is set aside. Instead the following decree is passed:

a] The defendants are directed to deliver vacant possession of the suit premises described in para 1 of the plaint within a period of three months from today.

b] The plaintiff is entitled to initiate proceedings for enquiry into mesne profits.

c] Defendants shall pay the costs of the proceedings to the plaintiff. Decree be drawn accordingly.